THE  AMERICAN  TOBACCO  COMPANY 

AND 

GUARANTY  TRUST  COMPANY  OF  NEW  YORK 

AS  TRUSTEE 


TRUST  AGREEMENT 

Dated  November  1,  1918. 


$25,000,000 

SEVEN  PER  CENT.  SERIAL  GOLD  NOTES 


Ths  Erenlng  Post  Job  Printing  Office,  Inc.,  1S6  Fulton  St.,  N.  T. 


Return  this  book  on  or  before  the 
Latest  Date  stamped  below. 


University  of  Illinois  Library 


135; 


Lb 


1— H41 


QThtS  Agrmtmtt,  made  as  of  the  1st  day  of  No¬ 
vember,  1918,  in  the  City  of  New  York,  between  The 
American  Tobacco  Company,  a  corporation  duly  organ¬ 
ized  and  existing  under  the  laws  of  the  State  of  New 
Jersey  (hereinafter  called  the  “Company” ) ,  party  of  the 
first  part,  and  Guaranty  Trust  Company  of  New  York, 
a  corporation  duly  organized  and  existing  under  the 
laws  of  the  State  of  NeAV  York  (hereinafter  called  the 
“Trustee”),  party  of  the  second  part: 

Whereas  the  Company  is  authorized  to  borrow  money 
for  its  corporate  purposes  and  to  issue  its  notes  or  other 
obligations  therefor;  and 

Whereas  the  Company  for  its  lawful  corporate  pur¬ 
poses  has  duly  authorized  the  issuance  of  its  notes,  to 
be  known  as  its  Seven  Per  Cent.  Serial  Gold  Notes,  for 
the  aggregate  principal  amount  of  Twenty-Five  Million 
Dollars  ($25,000,000) ,  each  for  the  principal  sum  of  One 
Thousand  Dollars  ($1,000)  all  to  be  dated  November 
1,  1918,  to  be  issued  in  five  series,  said  series  to  be 
known  as  Series  A,  Series  II,  Series  C,  Series  D  and 
Series  E,  respectively,  the  principal  amount  of  each 
series  and  the  date  when  the  respective  series  are 
to  be  payable  being  as  follows : — Series  A  for  $5,000,- 
000  payable  on  November  1,  1919,  Series  B  for 
$3,333,000.  payable  on  November  1,  1920,  Series  C  for 
$3,333,000.  payable  on  November  1,  1921,  Series  D  for 
$3,331,000.  payable  on  November  1,  1922,  and  Series  E 
for  $10,000,000.  payable  on  November  1,  1923;  said 
notes  to  be  issued  as  coupon  notes  registerable  as  to 
principal  only,  and  to  bear  interest  at  the  rate  of  seven 
per  cent.  (7%)  per  annum  from  November  1,  1918,  pay¬ 
able  semi-annually  on  the  first  day  of  May  and  the  first 


2 

day  of  November  in  each  year  until  the  principal  sum  be 
paid,  and  to  be  duly  authenticated  by  the  certificate  of  the 
Trustee  hereunder ;  and 

Whereas  the  Company,  in  the  exercise  of  its  corpo¬ 
rate  powers,  and  in  pursuance  of  appropriate  resolutions 
of  its  Board  of  Directors,  has  duly  determined  to  estab¬ 
lish  the  terms  and  conditions  on  which  such  notes  are  to 
be  issued,  by  the  execution  and  delivery  of  this  Agree¬ 
ment;  and 

Whereas  the  notes  and  interest  coupons  and  the 
Trustee’s  certificate  therein  provided  for  are  to  be  sub¬ 
stantially  in  the  following  form : 

[form  of  note.] 

UNITED  STATES  OF  AMERICA 
State  of  New  Jersey 
THE  AMERICAN  TOBACCO  COMPANY 
Seven  Per  Cent.  Serial  Gold  Note  Series 
No .  $1,000 

The  American  Tobacco  Company,  a  corporation  of 
the  State  of  New  Jersey  (hereinafter  called  the  Com¬ 
pany),  for  value  received,  hereby  promises  to  pay  to 
Guaranty  Trust  Company  of  New  York  (hereinafter 
called  the  Trustee)  or  bearer,  or  in  case  this  note 
be  registered,  to  the  registered  holder  hereof,  the  sum 
of  One  Thousand  Dollars  in  gold  coin  of  the  United  States 
of  America  of  or  equal  to  the  present  standard  of  weight 
and  fineness,  at  the  office  of  Guaranty  Trust  Company  of 
New  York  in  the  Borough  of  Manhattan,  City  and  State 
of  New  York,  on  the  first  day  of  November,  19  ,  and  to 

pay  interest  thereon  from  and  including  November  1, 
1918,  in  like  gold  coin  at  the  rate  of  seven  per  cent.  (7%) 
per  annum  on  May  1,  and  November  1,  in  each  year  until 


3 


such  principal  sum  shall  be  paid,  on  presentation  and 
surrender  at  said  office  of  the  annexed  coupons  as  they 
severally  become  due.  Both  principal  and  interest  of  this 
note  are  payable  without  deduction  for  any  tax,  assess¬ 
ment  or  other  governmental  charge  which  the  Company 
or  the  Trustee  hereinafter  mentioned  may  be  author¬ 
ized  or  required  to  pay  thereon  or  to  retain  or  deduct 
therefrom  by  virtue  of  any  present  or  future  law  or  re¬ 
quirement  of  the  United  States  of  America,  or  of  any  state, 
county,  municipality  or  other  taxing  authority  therein, 
except  such  portion  of  any  Federal  income  tax  in  respect 
to  income  derived  from  such  interest  as  shall  be  in  excess 
of  two  per  cent. 

This  note  is  one  of  a  duly  authorized  issue  of  notes 
of  the  Company  limited  to  the  aggregate  principal  amount 
of  Twenty-Five  Million  Dollars  (-125,000,000)  at  any  one 
time  outstanding,  known  as  its  Seven  Per  Cent.  Serial 
Gold  Notes,  all  of  like  tenor,  except  as  to  dates  of 
maturity,  and  all  issued  under  and  pursuant  to  an  Agree¬ 
ment  dated  November  1,  1918,  duly  executed  by  the  Com¬ 
pany  to  Guaranty  Trust  Company  of  New  York,  as  Trus¬ 
tee.  As  provided  in  said  Agreement,  said  notes  are 
issuable  in  five  series,  designated  Series  A  to  E,  inclusive, 
the  principal  amount  and  date  of  maturity  of  each  series 
being  as  follows  : — Series  A  for  $5,000,000  maturing  on 
November  1,  1919,  Series  B  for  $3,333,000  maturing  on 
November  1,  1920,  Series  C  for  $3,333,000  maturing 
on  November  1,  1921,  Series  D  for  $3,334,000  maturing 
on  November  1,  1922,  and  Series  E  for  $10,000,000 
maturing  on  November  1,  1923.  Reference  is  hereby  made 
to  said  Agreement  for  a  description  of  the  terms  and  con¬ 
ditions  on  which  such  notes  are  issued,  and  of  the  rights 
of  the  Trustee  and  the  holders  of  the  notes  under  the 
same.  Except  as  provided  in  said  Agreement,  all  rights 
of  action  on  this  note  and  the  coupons  hereto  attached 
are  vested  exclusively  in  the  Trustee,  and  the  enforcement 
thereof  is  subject  to  the  provisions  of  said  Agreement. 

At  the  option  of  the  Company  all  of  said  notes  or 
all  the  notes  of  any  one  or  more  series  first  maturing, 
may  be  redeemed  at  any  time  prior  to  maturity,  on  at 
least  thirty  days’  published  notice,  as  provided  in  said 
Agreement,  at  the  principal  amount  thereof  and  accrued 


4 


interest,  together  with  the  following  premiums  on  the 
principal  amount  thereof :  five  per  cent.  (5%)  in  the  case 
of  any  series  payable  four  years  or  more  from  the  date 
fixed  for  redemption,  four  per  cent.  (4%)  in  the  case  of 
any  series  payable  three  years  or  more  but  less  than  four 
years  from  the  date  fixed  for  redemption,  three  per  cent. 
(3%)  in  the  case  of  any  series  payable  two  years  or  more 
but  less  than  three  years  from  the  date  fixed  for  redemp¬ 
tion,  two  per  cent.  (2% )  in  the  case  of  any  series  payable 
one  year  or  more  but  less  than  two  years  from  the  date 
fixed  for  redemption,  and  one  per  cent.  (1%)  in  the  case 
of  any  series  payable  in  less  than  one  year  from  the  date 
fixed  for  redemption. 

In  case  of  certain  defaults  specified  in  the  Agreement, 
the  principal  of  this  note  and  of  all  the  other  notes  of 
this  issue  may  be  declared  and  may  become  due  and 
payable  in  the  manner  and  with  the  effect  provided  in  the 
Agreement. 

This  note  shall  pass  by  delivery  unless  registered  in 
the  owner’s  name  at  the  office  or  agency  of  the  Company 
in  the  Borough  of  Manhattan,  City  of  New  York,  such 
registration  being  noted  hereon.  After  such  registra¬ 
tion  no  transfer  hereof  shall  be  valid,  unless  made  by 
the  registered  owner  in  person  or  by  his  duly  author¬ 
ized  attorney  and  similarly  noted  hereon;  but  the  same 
may  be  discharged  from  registration  by  being  in  like 
manner  transferred  to  bearer,  and  thereupon  transfera¬ 
bility  by  delivery  shall  be  restored,  but  this  note  may 
again  from  time  to  time  be  registered  or  transferred  to 
bearer  as  before.  Such  registration  shall  not,  however, 
affect  the  negotiability  of  the  coupons,  which  shall  con¬ 
tinue  to  be  transferable  by  delivery. 

No  recourse  shall  be  had  for  the  payment  of  the  prin¬ 
cipal  of  or  the  interest  upon  this  note,  or  for  any  claim 
based  thereon,  or  otherwise  in  respect  thereof,  or  of  the 
Agreement  under  which  this  note  is  issued,  against  any 
incorporator,  stockholder,  officer  or  director,  past,  present 
or  future,  of  the  Company,  or  of  any  successor  corpora¬ 
tion,  whether  by  virtue  of  any  constitution,  statute  or 
rule  of  law,  or  by  the  enforcement  of  any  assessment  or 
penalty  or  otherwise,  such  liability  being  by  the  accept- 


ance  hereof,  and  as  part  of  the  consideration  of  the  issue 
hereof,  expressly  released. 

This  note  shall  not  be  valid  or  become  obligatory 
for  any  purpose  until  it  shall  have  been  authenticated 
by  the  execution  of  the  certificate  hereon  endorsed  by 
the  Trustee  under  the  Agreement. 

In  witness  whereof  The  American  Tobacco  Com¬ 
pany  has  caused  this  note  to  be  signed  by  its  President 
or  a  Vice-President,  and  its  corporate  seal  to  be  hereunto 
affixed  and  attested  by  its  Secretary  or  an  Assistant  Secre¬ 
tary,  and  coupons  for  said  interest  bearing  the  engraved 
fac  simile  signature  of  its  Treasurer  to  be  attached  hereto, 
as  of  the  first  day  of  November,  1918. 

The  American  Tobacco  Company, 

By 


Attest : 


President. 


. Secretary. 

[form  of  interest  coupon.] 

No .  $35. 

On  the  first  day  of  ,  19  ,  The  American 

Tobacco  Company  will  pay  to  the  bearer,  at  the  office 
of  Guaranty  Trust  Company  of  New  York  in  the  Borough 
of  Manhattan,  City  and  State  of  New  York,  Thirty  Five 
Dollars  ($35.)  in  United  States  gold  coin,  without  de¬ 
duction  for  taxes,  except  so  much  of  any  Federal  income 
tax  as  may  exceed  two  per  cent,  of  the  face  value  hereof, 
as  specified  in  the  Note,  being  six  months’  interest  then 
due  on  its  Seven  Per  Cent.  Serial  Gold  Note,  Series  , 
No.  ,  unless  such  note  shall  have  been  called  for 

previous  redemption. 


Treasurer. 


G 


[form  of  trustee's  certificate.] 

This  is  one  of  the  notes  described  in  the  within  men¬ 
tioned  Agreement. 

Guaranty  Trust  Company  of  New  York,  Trustee, 

By . 


and 

Whereas  all  acts,  conditions  and  things  necessary  to 
make  said  notes,  when  executed  by  the  Company  and 
certified  by  the  Trustee,  the  valid,  binding  and  legal 
obligations  of  the  Company,  find  to  make  this  Agreement 
a  valid  and  binding  agreement  for  the  enforcement  of 
the  payment  of  said  notes  and  the  interest  thereon,  have 
been  done  and  performed,  and  the  execution  and  issue 
of  said  notes  and  the  execution  of  this  Agreement  have 
in  all  respects  been  duly  authorized,  and  the  Company 
has  executed  this  Agreement  and  proposes  to  issue  the 
notes  hereby  secured,  in  the  exercise  of  the  legal  right 
and  power  in  it  vested, 

Now,  therefore,  in  consideration  of  the  premises, 
and  of  the  sum  of  one  dollar  duly  paid  by  the  Trustee  to 
the  Company,  the  receipt  whereof  is  hereby  acknowl¬ 
edged,  and  of  the  purchase  and  acceptance  of  the  said 
notes  by  the  holders  thereof,  it  is  hereby  covenanted  and 
agreed  by  and  between  the  parties  hereto,  for  the  equal 
benefit  of  the  holder  or  holders  of  any  and  all  of  the  said 
notes  and  coupons  at  any  time  issued  hereunder,  as 
follows : 


ARTICLE  I. 

Execution  and  Delivery  of  Notes. 

The  amount  of  notes  which  may  be  executed  by  the 
Company  and  certified  by  the  Trustee  is  limited  so  that 
never  at  any  one  time  shall  there  be  outstanding  notes 
issued  hereunder  in  an  aggregate  principal  amount  ex¬ 
ceeding  Twenty-Five  Million  Dollars  ( $25,000, 000) . 

Notes  for  the  aggregate  principal  amount  of  Twenty- 
Five  Million  Dollars  ($25,000,000)  and  no  more  shall  be 
certified  by  the  Trustee  upon  the  request  of  the  Company 
at  once  or  at  any  time  or  times  hereafter  and  delivered  in 
accordance  with  the  order  or  orders  of  the  Company  evi¬ 
denced  by  a  writing  or  writings  signed  by  its  President 
or  a  Vice-President  and  its  Treasurer  or  an  Assistant 
Treasurer. 

The  notes  shall  be  issued  in  coupon  form,  payable  to 
Guaranty  Trust  Company  of  New  York,  as  Trustee,  or, 
bearer,  and  shall  be  registerable  as  to  principal  only. 
The  notes,  coupons  and  Trustee’s  certificate  shall  be  sub¬ 
stantially  of  the  tenor  and  purport  hereinbefore  set  forth, 
and  the  notes  shall  be  known  as  the  Company’s  Seven  Per 
Cent.  Serial  Gold  Notes.  They  shall  be  dated  November 
1,  1918,  shall  be  issued  in  five  series,  said  series  to  be 
known  as  Series  A,  Series  B,  Series  C,  Series  D  and 
Series  E,  respectively,  and  the  principal  amount  of  each 
series  and  the  dates  when  the  respective  series  are  to  be 
payable  being  as  follows :  Series  A  for  $5,000,000  payable 
on  November  1,  1919,  Series  B  for  $3,333,000  payable  on 
November  1,  1920,  Series  C  for  $3,333,000  payable  on 
November  1,  1921,  Series  D  for  $3,334,000  payable  on 
November  1,  1922,  and  Series  E  for  $10,000,000  payable 
on  November  1, 1923.  Said  notes  shall  bear  interest  from 
November  1, 1918,  at  the  rate  of  seven  per  cent.  (7%)  per 
annum,  payable  semi-annually  on  the  first  day  of  May 


8 


and  the  first  day  of  November  in  each  year  until  the 
principal  sum  be  paid.  They  shall  be  in  the  denomination 
of  $1,000  each,  and  all  notes  of  each  series  shall  bear  their 
series  letter  and  shall  be  numbered  consecutively. 

Until  permanent  coupon  notes  are  ready  for  delivery 
there  may  be  issued,  certified  and  delivered  in  lieu  thereof, 
upon  the  conditions  above  stated,  temporary  notes  with¬ 
out  coupons,  each  for  one  thousand  dollars  principal 
amount,  or  a  multiple  thereof,  and  otherwise  substantially 
of  the  tenor  of  the  notes  hereinbefore  described,  and  as 
soon  as  such  permanent  coupon  notes  can  be  prepared  the 
Company  will  execute  and  the  Trustee  will  certify  and 
deliver  the  same  with  all  unmatured  coupons  thereto 
attached  in  exchange  for  such  temporary  notes.  Until  so 
exchanged,  such  temporary  notes  shall  in  all  respects  be 
entitled  to  the  same  benefit  of  this  Agreement  as  per¬ 
manent  notes  issued  and  certified  hereunder.  Upon  sur¬ 
render  of  any  temporary  note  or  notes  at  the  office  or 
agency  of  the  Company  in  the  Borough  of  Manhattan, 
City  of  New  York,  with  request  from  the  holder  thereof 
that  there  be  issued,  certified  and  delivered  in  exchange 
therefor  other  temporary  notes  for  several  specified 
amounts  of  principal,  but  for  the  same  aggregate  principal 
amount  as  the  temporary  notes  surrendered,  temporary 
notes  shall  be  issued,  certified  and  delivered  in  accordance 
with  such  request.  Every  temporary  note  surrendered  in 
exchange,  either  for  other  temporary  notes  or  for  per¬ 
manent  notes,  shall  be  destroyed.  Any  interest  on  any 
temporary  note  paid  prior  to  any  exchange  of  such  tem¬ 
porary  note  for  another  temporary  note  or  notes  or  for 
a  permanent  note  or  notes,  shall  be  noted  in  writing  upon 
such  temporary  note. 

Execution  of  notes  by  the  proper  officers  at  the  time 
of  execution  shall  bind  the  Company,  notwithstanding 
any  change  of  officers  prior  to  certification  or  delivery, 


9 


and  coupons  attached  to  said  notes,  bearing  the  fac-simile 
of  the  signature  of  the  person  who  is  the  Treasurer  of  the 
Company  at  the  date  of  this  Agreement  or  at  any  time 
thereafter,  shall  bind  the  Company,  notwithstanding  such 
person  shall  have  ceased  to  hold  such  office  prior  to  cer¬ 
tification  and  delivery. 

No  temporary  or  permanent  note  shall  be  valid  or 
shall  become  obligatory  for  any  purpose  until  it  shall 
have  been  authenticated  by  the  certificate  of  the  Trustee 
endorsed  thereon. 

The  certificate  of  the  Trustee  upon  any  temporary  or 
permanent  note  executed  by  the  Company  shall  be  conclu¬ 
sive  evidence  and  the  only  evidence  that  the  note  so  certi¬ 
fied  has  been  duly  certified  and  delivered  hereunder  and 
that  the  holder  thereof  is  entitled  to  the  benefit  of  the 
trust  hereby  created. 

In  case  any  note  with  the  coupons  thereto  appertain¬ 
ing  shall  be  mutilated  or  destroyed,  the  Company  in  its 
discretion  may  issue,  and  thereupon  the  Trustee  shall 
authenticate  and  deliver,  a  new  note  of  like  tenor  and 
date,  bearing  the  same  serial  number  or  numbers,  in 
exchange  and  substitution  for,  and  upon  cancellation  of, 
the  mutilated  note  and  its  coupons,  or  in  lieu  of  and  in 
substitution  for,  the  note  and  its  coupons  so  destroyed. 
The  applicant  for  such  substituted  note  shall  furnish 
the  Company  and  the  Trustee  satisfactory  evidence  of 
the  destruction  of  such  note  and  its  coupons,  and  said 
applicant  shall  also  furnish  indemnity  satisfactory  to 
both  of  them  in  their  discretion. 

ARTICLE  II. 

Covenants  of  the  Company. 

The  Company  hereby  covenants  as  follows: 

Section  1.  That  it  will  duly  and  punctually  pay  or 
cause  to  be  paid  to  every  holder  of  any  note  issued  here- 


10 


under  the  principal  and  interest  accruing  thereon  in  gold 
coin  of  the  United  States  of  America  of  or  equal  to  the 
present  standard  of  weight  and  fineness,  upon  the  dates 
and  at  the  place  or  places  and  in  the  manner  mentioned 
in  said  notes  or  in  the  coupons  thereto  appertaining,  in 
accordance  with  their  tenor  and  effect,  without  deduc¬ 
tion  from  either  principal  or  interest  of  any  tax, 
assessment  or  other  governmental  charge  which  the  Com¬ 
pany  or  the  Trustee  may  be  required  or  authorized 
to  pay  thereon  or  to>  retain  or  deduct  therefrom  by  virtue 
of  any  present  or  future  law  or  requirement  of  the 
United  States  of  America,  or  of  any  state,  county, 
municipality  or  other  taxing  authority  therein  (except 
such  portion  of  any  Federal  income  tax  in  respect  to  in¬ 
come  derived  from  such  interest  as  shall  be  in  excess  of 
two  per  cent.).  As  notes  and  the  coupons  annexed  to 
said  notes  are  paid  they  shall  be  cancelled  and  no  other 
notes  shall  be  issued  in  lieu  thereof.  Notes  and  coupons 
shall  not  be  kept  alive  after  maturity  by  extension  thereof 
or  by  purchase  by  or  on  behalf  of  the  Company. 

Section  2.  That  it  will  keep  an  office  or  agency  in 
the  Borough  of  Manhattan,  City  of  New  York,  while  any 
of  said  notes  are  outstanding,  where  notices,  presenta¬ 
tions  and  demands  to  or  upon  the  Company  in  respect  of 
said  notes  or  their  coupons  may  be  given  or  made,  and 
will  from  time  to  time  give  written  notice  to  the  Trustee 
of  such  office  or  agency.  In  default  of  any  such 
office  or  agency,  presentation  and  demand  may  be  made 
and  notice  served  at  the  office  of  the  Trustee.  That  at 
an  office  or  agency  to  be  maintained  by  it  in  the  Borough 
of  Manhattan,  City  of  New  York,  it  will  keep  registry 
books  on  which  upon  request  any  note  shall  be  registered 
as  to  the  principal  thereof,  and  the  transfer  of  any  note  so 
registered  shall  be  registered,  all  without  expense  to  the 


4 


11 


holder.  The  Trustee  shall  have  access  to  said  books  at  all 
reasonable  times,  and  upon  request  in  writing  shall  be 
furnished  with  a  list  of  the  registrations  shown  thereon 
at  any  specific  date. 

Section  3.  So  long  as  any  of  the  notes  are  outstand¬ 
ing,  the  Company  after  the  date  of  this  Agreement  will 
not  mortgage  or  pledge  any  of  its  real  or  personal  prop¬ 
erty,  or  any  part  thereof,  except  United  States  Govern¬ 
ment  obligations. 

In  case  of  a  breach  of  this  covenant,  in  addition  to  any 
other  penalty  herein  provided  for  such  breach,  the  Com¬ 
pany  hereby  creates  a  lien  and  charge  in  favor  of  every 
note  issued  hereunder  prior  and  superior  to  the  lien  in 
favor  of  any  other  bonds,  notes  or  other  obligations  se¬ 
cured  by  any  mortgage  or  pledge  not  herein  permitted  but 
junior  and  subordinate  to  the  lien  of  the  Forty-Year  Six 
Per  Cent.  Gold  Bonds  of  the  Company  maturing  October 
1,  1944,  and  the  Four  Per  Cent.  Gold  Bonds  of  the  Com¬ 
pany  maturing  August  1,  1951,  hereinafter  more  specific¬ 
ally  referred  to  in  Section  4  of  this  Article  2. 

To  make  this  covenant  fully  effectual,  the  Company 
hereby  includes  under  and  secures  by  any  mortgage,  pledge 
or  deed  of  trust  hereafter  made  or  executed  by  the  Com¬ 
pany,  not  herein  permitted,  any  and  all  notes  issued  here¬ 
under,  with  the  same  force  and  effect  as  though  each  and 
every  said  note  were  specifically  named  and  included  in 
any  such  future  mortgage,  pledge  or  deed  of  trust,  in  pri¬ 
ority  to  any  bonds,  notes  or  other  obligations  issued  and 
secured  by  such  future  mortgage,  pledge  or  deed  of  trust, 
excepting  the  said  Six  Per  Cent.  Gold  Bonds  and  Four 
Per  Cent.  Gold  Bonds. 

Section  4.  On  the  date  of  the  execution  and  delivery 
of  this  Agreement  there  are  issued  and  outstanding  under 


I 


U.  OF  ILL  LIB. 


12 


tlie  Trust  Indenture  made  by  this  Company  to  Morton 
Trust  Company,  Trustee,  dated  October  20,  1904  (under 
which  Trust  Indenture  Guaranty  Trust  Company  of  New 
York  is  now  Trustee),  $674,200.  principal  amount,  and  no 
more,  of  Forty-Year  Six  Per  Cent.  Gold  Bonds  of  the 
Company  maturing  on  October  1,  1944,  and  $612,550 
principal  amount  and  no  more  of  the  Four  Per  Cent. 
Gold  Bonds  of  the  Company  maturing  August  1,  1951; 
and  $752,750  principal  amount  and  no  more  of 
Four  Per  Cent.  Gold  Bonds  of  Consolidated  Tobacco 
Company,  maturing  August  1,  1951,  issued  under  a  Trust 
Indenture  made  by  Consolidated  Tobacco  Company  to 
Morton  Trust  Company,  as  Trustee,  dated  June  15,  1901 
(under  which  Trust  Indenture  Guaranty  Trust  Company 
of  New  York  is  now  Trustee),  payment  of  which  bonds 
has  been  assumed  by  the  Company ;  so  long  as  any  of  the 
notes  are  outstanding,  the  Company  will  not  issue  any 
additional  of  its  said  Forty-Year  Six  Per  Cent.  Gold 
Bonds,  or  Four  Per  Cent.  Gold  Bonds,  or  of  the  said 
Four  Per  Cent.  Gold  Bonds  of  the  Consolidated  Tobacco 
Company,  except  that  additional  of  its  said  Four  Per 
Cent.  Gold  Bonds  may  be  issued  in  exchange  for  its  said 
Consolidated  Tobacco  Company  Four  Per  Cent.  Gold 
Bonds  as  provided  under  its  above  mentioned  Trust  In¬ 
denture  dated  October  20,  1904. 

Section  5.  The  Company  represents  that  at  the  date 
of  the  making  of  this  Agreement  it  owns  free  of  any  lien  or 
charge,  except  as  hereinafter  set  forth  in  subdivision  1  of 
this  Section  5,  and  has  full  corporate  power  to  exercise 
and  is  lawfully  entitled  to  exercise  all  rights  as  owner 
of  the  following  shares  of  stock  of  the  following  corpora¬ 
tions  (hereinafter  for  convenience  referred  to  as  “sub¬ 
sidiary  companies”) : 

1.  Ninety  thousand  seven  hundred  fifty  (90,- 
750)  shares  of  the  preferred  stock  and  sixty-one 


13 


thousand  four  hundred  thirty  (01,430)  shares  of 
the  common  stock  of  American  Cigar  Company,  a 
corporation  organized  and  existing  under  the  laws 
of  the  State  of  New  Jersey,  having  authorized 
and  outstanding  One  hundred  thousand  (100,000) 
shares  of  preferred  and  one  hundred  thousand 
(100,000)  shares  of  common  stock  of  the  par  value 
of  one  hundred  dollars  ($100.)  each.  Of  the  above 
9,000  shares  of  preferred  stock  are  now  pledged 
by  the  Company; 

2.  Thirteen  thousand  nine  hundred  seventy- 
four  (13,974)  shares  of  Golden  Belt  Manufacturing 
Company,  a  corporation  duly  organized  and  exist¬ 
ing  under  the  laws  of  the  State  of  New  Jersey, 
having  an  authorized  capital"  of  one  million  seven 
hundred  thousand  dollars  ($1,700,000.),  consist¬ 
ing  of  seventeen  thousand  (17,000)  shares  of  the 
par  value  of  one  hundred  dollars  ($100.)  each,  of 
which  fifteen  thousand  (15,000)  shares  are  now 
issued  and  outstanding; 

3.  Forty-two  thousand  five  hundred  and  seven 
(42,507)  shares  of  the  common  stock  of  Men- 
gel  Box  Company,  a  corporation  duly  organized  and 
existing  under  the  laws  of  the  State  of  New  Jersey, 
having  an  authorized  capital  of  ten  million  dollars 
($10,000,000.),  consisting  of  forty  thousand  (40,- 
000)  shares  of  preferred  stock  and  sixty  thousand 
(60,000)  shares  of  common  stock,  of  the  par  value 
of  one  hundred  dollars  ($100.).  each,  of  which  no 
shares  of  preferred  stock  and  sixty  thousand  (60,- 
000)  shares  of  common  stock  are  now  issued  and 
outstanding; 

4.  Eleven  thousand  six  hundred  sixty  (11,660) 
shares  of  the  preferred  stock  and  nineteen  thousand 
one  hundred  fifty  (19,150)  shares  of  the  common 
stock  of  Tin  Decorating  Company  of  Baltimore,  a 
corporation  duly  organized  and  existing  under  the 
Laws  of  the  State  of  New  Jersey,  having  an  au¬ 
thorized  capital  of  three  million  four  hundred 
thousand  dollars  ($3,400,000.),  consisting  of  four¬ 
teen  thousand  (14,000)  shares  of  preferred  stock 


14 


and  twenty  thousand  (20,000)  shares  of  common 
stock,  of  the  par  value  of  one  hundred  dollars 
($100.)  each,  of  which  twelve  thousand  (12,000) 
shares  of  preferred  stock  and  twenty  thousand 
(20,000)  shares  of  common  stock  are  now  issued 
and  outstanding. 

The  Company  will  not  sell  or  otherwise  dispose  of  any 
of  the  shares  of  stock  of  said  subsidiary  companies  or  any 
of  them  now  or  hereafter  owned  by  it,  unless  the  proceeds 
of  such  sale  or  other  disposition  shall  be  deposited  with 
the  Trustee  to  be  applied  by  the  Trustee  in  accordance 
with  the  provisions  of  Article  III  of  this  Agreement. 

Section  6.  The  Company  will  not  sell,  lease  or  oth¬ 
erwise  dispose  of  any  of  the  real  estate,  plants,  brands, 
trade  marks,  patents  or  other  property,  real  or  personal, 
now  or  hereafter  owned  by  it,  except  “quick  assets,”  as 
hereinafter  defined  in  Section  10  of  this  Article  II, 
and  except  shares  of  stock  of  companies  other  than  “sub¬ 
sidiary  companies”,  unless  the  proceeds  of  such  sale,  lease 
or  other  disposition  shall  be  deposited  with  the  Trustee 
to  be  applied  by  the  Trustee  as  hereinafter  provided  in 
Article  III  of  this  Agreement. 

Section  7.  That  on  or  before  the  first  day  of  Feb¬ 
ruary  and  the  first  day  of  August  in  each  year,  the  Com¬ 
pany  will  furnish  to  the  Trustee  a  statement  in  writing, 
signed  by  its  president  or  any  vice-president  and  its  treas¬ 
urer  or  any  assistant  treasurer,  showing : 

1.  The  amount  of  capital  stock  of  each  sub¬ 
sidiary  company  outstanding  on  the  date  of  such 
certificate,  specifying  the  number  of  shares  and 
the  par  value  of  such  shares  and  the  number  of  the 
shares  owned  by  the  Company  and  whether  such 
shares  are  free  from  any  lien  or  pledge; 

2.  Whether  any  subsidiary  company,  since  the 
date  of  this  Agreement  or  since  the  date  of  the  last 


15 


certificate,  has  issued  any  additional  shares  of 
stock,  and  if  so  the  amount  of  such  issue  and  the 
number  of  shares  acquired  by  the  Company; 

3.  Whether  the  Company  since  the  date  of  this 
Agreement  or  the  date  of  the  last  certificate,  has 
sold  any  shares  of  stock  of  any  subsidiary  com¬ 
pany,  the  number  of  shares  so  sold  and  the  price 
realized  from  such  sale  and  the  application  of  such 
sale  price; 

4.  Whether  the  Company,  since  the  date  of  this 
Agreement  or  the  date  of  the  last  certificate,  has 
sold,  leased  or  otherwise  disposed  of  any  of  its  real 
estate,  plants,  brands,  trade  marks,  patents  or 
other  property  (except  “quick  assets”  as  defined 
in  Section  10  of  this  Article  II  and  except  shares 
of  stock  of  a  company  other  than  a  subsidiary 
company),  and  the  consideration  received  for  any 
such  sale,  lease  or  other  disposition,  and  the  appli¬ 
cation  thereof. 

Section  8.  That  in  case  any  subsidiary  company 
shall  issue  any  additional  shares  of  stock,  the  Company 
will  forthwith  acquire,  free  from  any  lien  or  pledge,  such 
proportion  of  the  additional  stock  as  shall  be  at  least  equal 
to  the  proportion  of  the  whole  thereof  held  by  the  Com¬ 
pany  before  the  issue  of  such  additional  shares. 

Section  9.  That  it  will  promptly  pay  and  discharge 
all  lawful  taxes,  assessments  and  governmental  charges 
or  levies  imposed  upon  the  income  and  profits  of  the  Com¬ 
pany,  or  upon  any  property,  real,  personal  or  mixed, 
belonging  to  the  Company,  or  upon  any  part  thereof,  as 
and  when  the  same  may  become  due  and  payable,  pro¬ 
vided,  however,  that  the  Company  shall  not  be  required 
to  pay  any  such  tax,  assessment,  charge  or  levy  so  long 
as  the  validity  thereof  shall  be  contested  in  good  faith  by 
appropriate  legal  proceedings. 

Section  10.  That  it  will  at  all  times  maintain  quick 
assets  in  an  aggregate  amount  equal  to  at  least  one  and 


16 


three-quarters  times  (175%  of)  the  aggregate  amount  of 
the  outstanding  notes  and  all  its  other  liabilities  exclud¬ 
ing— 

(a.)  the  aggregate  principal  amount  of  dividend 
certificates  now  or  hereafter  issued  in  lieu  of 
cash  dividends,  which  certificates  at  the  time 
shall  mature  later  than  one  year ; 

(6)  its  Forty-Year  Six  Per  Cent.  Gold  Bonds  ma¬ 
turing  October  1,  1944,  its  Four  Per  Cent, 
Gold  Bonds  maturing  August  1,  1951  and  its 
Consolidated  Tobacco  Company  Four  Per 
Cent.  Gold  Bonds  maturing  August  1,  1951, 
issued  prior  to  the  date  of  this  Agreement,  ex¬ 
cept  as  provided  in  Section  4  of  this  Article  2. 

(c)  notes  secured  by  obligations  of  the  United 
States  Government  of  an  aggregate  principal 
amount  at  least  equal  to  the  principal  amount 
of  such  notes; 

Dividend  certificates  redeemable  in  stock  only 
and  stock  itself,  now  or  hereafter  issued,  whether 
preferred,  common  or  common  B  stock  or  any 
other  class  of  stock,  shall  not  be  taken  to  be  a 
liability. 

The  term  “quick  assets”  as  used  in  this  Agreement 
shall  be  taken  to  mean: 

(a)  cash  on  hand  or  in  bank; 

( b )  leaf  tobacco,  manufactured  stock,  stock  in 
process,  operating  and  other  supplies,  includ¬ 
ing  revenue  stamps,  all  to  be  valued  at  actual 
cost  or  at  the  market  value  thereof  if  that  be 
lower ; 

(e)  good  and  collectible  notes,  accounts  and  bills 
receivable  contracted  in  the  ordinary  course  of 
business,  if  such  notes,  accounts  and  bills  re¬ 
ceivable  are  due  within  one  year  (excluding 
such  notes,  accounts  and  bills  receivable  as  are 


17 


owing  to  the  Company  by  corporations,  any  of 
whose  shares  of  stock  is  owned  by  the  Com¬ 
pany)  ; 

( d )  obligations  of  the  United  States  Government 
to  be  valued  at  not  more  than  the  market  value 
(except  such  obligations  as  have  been  used  by 
the  Company  to  secure  notes  that  are  herein¬ 
before  excluded  as  liabilities). 

Section  11.  That  it  will  at  all  times  keep  proper 
books  of  record  and  account,  in  which  full,  true  and  cor¬ 
rect  entries  will  be  made  of  all  dealings  and  transactions 
of  or  in  relation  to  the  plants,  properties,  business  and  af¬ 
fairs  of  the  Company;  that,  within  sixty  (60)  days  after 
the  thirty-first  day  of  March,  the  thirtieth  day  of  June 
and  the  thirtieth  day  of  September  in  each  year,  the  Com¬ 
pany  will  render  to  the  Trustee  a  statement  of  its  general 
balance  sheet  taken  at  the  close  of  business  the  thirty-first 
day  of  March,  the  thirtieth  day  of  June  and  the  thirtieth 
day  of  September  of  such  year,  respectively,  setting  forth 
in  reasonable  detail  the  financial  condition  of  the  Com¬ 
pany  and  the  aggregate  value  of  the  quick  assets  of  the 
Company  and  the  aggregate  amount  of  its  liabilities 
within  the  meaning  of  this  Agreement,  and  setting  forth 
also  the  amount  then  outstanding  of  its  Forty-Year  Six 
Per  Cent.  Gold  Bonds  maturing  October  1,  1944,  its  Four 
Per  Cent.  Gold  Bonds  maturing  August  1,  1951,  and  its 
Consolidated  Tobacco  Company  Four  Per  Cent.  Gold 
Bonds  maturing  August  1,  1951,  notes  secured  by  obli¬ 
gations  of  the  United  States  of  a  par  value  at  least  equal 
to  the  principal  amount  of  such  notes,  and  dividend  cer¬ 
tificates  issued  in  lieu  of  cash  dividends,  which,  at  the 
time  mature  later  than  one  year.  If  required  by  the 
Trustee,  any  such  statement  shall  be  duly  audited  by  a 
firm  of  certified  public  accountants  approved  by  the 
Trustee  (who  may  be  a  firm  employed  by  the  Company) 
who  shall  file  with  the  Trustee  a  certificate  of  such  audit. 


18 


Section  12.  That  at  its  own  cost  and  expense  it  will 
do  or  cause  to  be  done  all  things  necessary  to  preserve 
and  to  keep  in  full  force  and  effect  its  corporate  existence, 
rights  and  franchises,  and  that  it  will  comply  with  the 
laws  of  the  United  States,  of  the  State  of  New  Jersey  and 
with  the  laws  of  any  State  of  the  United  States  applicable 
to  the  Company  in  such  manner  and  form  as  counsel 
learned  in  the  law  shall  advise;  and  that  it  will  not  do  or 
suffer  any  matter  01;  thing  whatsover  whereby  the  indebt¬ 
edness  evidenced  by  the  notes  issued  hereunder  might  or 
could  be  impaired. 


ARTICLE  III. 

Control  of  Pledged  Securities. 

Section  1.  Any  notes  or  other  obligations  pledged 
with  the  Trustee,  pursuant  to  the  provisions  of  Sections 
5  and  6  of  Article  II  of  this  Agreement,  shall  be  assigned 
to  the  Trustee  in  its  own  name  or  in  the  name  of  its  nomi¬ 
nee  or  nominees  as  the  Trustee  shall  determine.  The 
Trustee  shall  be  entitled  to  collect  the  principal  and 
interest  upon  the  same  and  all  the  moneys  so  collected 
together  with  moneys  paid  over  to  the  Trustee,  pursuant 
to  the  provisions  of  said  Sections  5  and  6  of  Article  II, 
shall  be  applied  by  the  Trustee  as  follows : 

(a)  in  case  the  Company  has  called  for  redemption 
all  of  the  notes  or  all  of  one  or  more  series  of 
notes,  then,  upon  the  written  request  of  the 
Company  signed  by  its  President  or  a  Vice 
President  and  by  its  Secretary  or  an  Assistant 
Secretary  and  upon  the  receipt  of  moneys, 
which  with  the  moneys  so  held  by  the  Trustee, 
shall  be  sufficient  to  redeem  all  of  the  notes 
so  called  for  redemption,  the  moneys  so  held 
by  the  Trustee  under  this  Article  III,  or  such 
part  thereof  as  may  be  included  in  such  writ- 


19 


ten  request,  shall  be  applied  by  the  Trustee 
pursuant  to  such  written  request  to  the  pay¬ 
ment  of  the  notes  so1  called  for  redemption. 
The  accrued  interest  on  any  notes  so  redeemed 
shall  be  paid  by  the  Company  and  shall  not  be 
paid  out  of  the  funds  held  under  this  Article 
III. ;  or 

(b)  upon  the  written  request  of  the  Company 
signed  by  its  President  or  a  Vice  President 
and  its  Secretary  or  an  Assistant  Secretary, 
the  Trustee  from  time  to  time  at  the  expense 
of  the  Company  shall  publish  a  notice  at  least 
once  in  each  of  two  successive  weeks  in  at  least 
two  newspapers  of  general  circulation  pub¬ 
lished  in  the  Borough  of  Manhattan,  City  of 
New  York,  stating  the  aggregate  sum  of  money 
which  it  holds  under  this  Article  III  which  is 
to  be  applied  to  the  purchase  of  notes  and  that 
written  offers  of  sale  will  be  received  by  the 
Trustee  at  a  date  specified  in  such  notice,  being 
not  later  than  twenty  (20)  days  from  the  date 
of  the  first  publication,  when  the  Trustee  will 
open  offers  to  sell  to  it  notes  hereunder,  and,  as 
far  as  may  be,  will  apply  or  cause  to  be  applied 
all  sums  of  money  stated  in  such  notice  and 
applicable  thereto  to  the  purchase  of  notes  at 
the  lowest  prices  at  which  the  largest  amount 
of  notes  can  be  purchased  with  such  moneys, 
not  exceeding  the  redemption  prices  respec¬ 
tively  of  such  notes  and  accrued  interest.  The 
accrued  interest  on  any  notes  so  purchased  by 
the  Trustee  shall  be  paid  by  the  Company  and 
shall  not  be  paid  out  of  funds  held  under  this 
Article  III,  the  Company  hereby  agreeing  to 
make  such  payment  to  the  Trustee  as  requested 
by  it.  All  notes  so  purchased  shall  be  canceled 
and  no  new  notes  shall  be  issued  in  place 
thereof.  The  Trustee  shall  not  be  required 
to  apply  moneys  pursuant  to  this  subdivision 
(b)  of  Article  III  at  any  one  time  in  amounts 
of  less  than  $25, 000.00. ' 


20 


(c)  To  the  extent  that  the  moneys  received  by  the 
Trustee  and  held  under  this  Article  III  are  not 
applied  to  the  purchase  of  notes  or  toward 
the  payment  of  notes  called  for  redemption, 
such  moneys  shall  be  held  by  the  Trustee  as 
security  for  the  payment  of  the  last  maturing 
series  of  notes,  or,  in  case  of  default  here¬ 
under,  applied  pursuant  to  the  provisions  of 
Section  5  of  Article  V  of  this  Agreement. 

Section  2.  Unless  to  the  knowledge  of  the  Trustee  an 
event  of  default,  as  hereinafter  defined  in  Section  1  of 
Article  V,  shall  have  happened,  the  Company  may  from 
time  to  time  withdraw  for  collection  any  notes  or  other 
obligations  pledged  with  the  Trustee,  pursuant  to  the 
provisions  of  Sections  5  and  6  of  Article  II  of  this  Agree¬ 
ment,  and  the  Trustee  shall  deliver  such  notes  or  other 
obligations  for  collection  upon  the  written  order  of  the 
Company  signed  by  its  Treasurer  or  an  Assistant  Treas¬ 
urer  and  upon  delivery  to  it  of  a  receipt  of  the  Company 
also  signed  by  its  Treasurer  or  an  Assistant  Treasurer 
stating  that  the  Company  has  received  the  notes  or  other 
obligations  set  forth  in  such  receipt  in  trust,  and  that 
the  title  to  such  notes  or  other  obligations  and  the  pro¬ 
ceeds  of  any  collections  made  on  account  of  or  in  payment 
of  principal  and  interest  of  the  same  shall  remain  in 
Guaranty  Trust  Company  of  New  York  as  Trustee  under 
this  Agreement,  and  that  such  proceeds  as  and  when  re¬ 
ceived  by  the  Company  or  its  agents  shall  forthwith  be 
paid  over  to  Guaranty  Trust  Company  of  New  York  as 
Trustee  aforesaid. 

The  Company  shall  not  be  entitled  to  receive  from  the 
Trustee  any  such  notes  or  other  obligations  for  collection 
more  than  thirty  (30)  days  before  the  date  when  some 
interest  or  principal  shall  be  payable  upon  each  of  the 
notes  or  other  obligations  so  to  be  withdrawn. 


21 


As  to  each  and  every  withdrawal  which  may  be  made 
pursuant  to  this  Section  2  of  Article  III,  the  Company 
agrees  that  it  will  hold  separate  and  apart,  in  trust  for 
the  Trustee,  all  notes  or  other  obligations  so  withdrawn, 
and  the  proceeds  of  any  collections  on  account  of  or  in 
payment  of  the  principal  or  interest  of  such  notes  or 
other  obligations,  and  will  promptly  pay  over  to  the 
Trustee  such  proceeds  when  and  as  collected  by  it.  In 
case  the  Company  shall  fail  to  collect  and  pay  over  the 
principal  or  interest  of  any  notes  or  other  obligations  so 
withdrawn,  within  thirty  (30)  days  after  the  date  when 
the  principal  or  interest  of  any  such  notes  or  other  obli¬ 
gations  is  due,  then  the  Trustee,  in  its  discretion,  shall 
have  the  right  forthwith  to  demand  and  immediately  to 
receive  from  the  Company  all  the  notes  or  other  obliga¬ 
tions  so  withdrawn,  which  have  not  been  paid  in  full. 

The  Trustee  shall  be  fully  protected  in  making  de¬ 
liveries  of  notes  or  other  obligations  for  collection  upon 
delivery  to  it  of  the  orders  and  receipts  above  provided  for. 

ARTICLE  IV. 

Redemption  of  Notes. 

The  Company,  at  its  option,  may  redeem  all  of  the 
notes  issued  hereunder  and  then  outstanding,  or  all  the 
outstanding  notes  of  one  or  more  series  first  maturing,  at 
any  time  prior  to  maturity,  at  the  principal  amount  there¬ 
of  and  accrued  interest,  together  with  the  following  prem¬ 
iums  on  the  principal  amount  thereof :  five  per  cent.  (5% ) 
in  the  case  of  any  series  the  principal  of  which  is  payable 
four  years  or  more  from  the  date  fixed  for  redemption; 
four  per  cent,  (4% )  in  the  case  of  any  series  the  principal 
of  which  is  payable  three  years  or  more  but  less  than  four 
years  from  the  date  fixed  for  redemption ;  three  per  cent, 
(3%)  in  the  case  of  any  series  the  principal  of  which  is 


22 


payable  two  years  or  more  but  less  than  three  years  from 
the  date  fixed  for  redemption;  two  per  cent.  (2%)  in  the 
case  of  any  series  the  principal  of  wrhich  is  payable  one 
year  or  more  but  less  than  two  years  from  the  date  fixed 
for  redemption,  and  one  per  cent.  (1%)  in  the  case  of  any 
series  the  principal  of  which  is  payable  in  less  than  one 
3-ear  from  the  date  fixed  for  redemption.  Notice  of  inten¬ 
tion  to  redeem  shall  be  given  by  the  Company  by  publica¬ 
tion  in  two  daily  newspapers  of  general  circulation  pub¬ 
lished  in  the  Borough  of  Manhattan  in  the  City  of  New 
York,  twice  a  week  for  four  successive  weeks,  the  first  pub¬ 
lication  to  be  not  less  than  thirty  nor  more  than  forty 
days  before  such  redemption  date.  A  copy  of  said  notice 
shall  also  be  mailed  by  the  Company  at  least  thirty  and 
not  more  than  forty  days  before  such  date  to  the  holders 
of  registered  notes  which  are  to  be  redeemed,  at  their  last 
addresses  appearing  upon  the  registry  books  kept  at  the 
office  or  agency  of  the  Company.  Before  the  redemption 
date  specified  in  such  notice,  the  Company  will  deposit 
writh  the  Trustee  an  amount  sufficient  to  redeem  all  of  the 
outstanding  notes  which  are  to  be  redeemed,  to  be  held  for 
the  account  of  the  holders  thereof  and  to  be  paid  to  them 
respectively  upon  presentation  and  surrender  of  said 
notes  with  all  unmatured  coupons  thereto  attached.  The 
verified  certificate  of  any  officer  of  the  Company  as  to  the 
giving  of  proper  notice  of  redemption  shall  be  full  and 
complete  authority  to  the  Trustee  for  any  action  to  be 
taken  by  it  in  reliance  thereon. 

In  case  the  Company  shall  desire  to  exercise  such 
right  of  redemption  as  to  one  or  more  series  of  notes, 
the  notice  of  intention  to  redeem  shall  state  the  par¬ 
ticular  series  or  series  of  notes  to  be  redeemed,  and  that 
all  of  the  notes  in  each  such  series  are  to  be  so  redeemed. 

After  the  date  set  for  redemption,  the  notice  of  inten¬ 
tion  to  redeem  having  been  given  by  publication  and  the 


23 


necessary  funds  for  redemption  having-  been  deposited 
with  the  Trustee,  said  notes  shall  cease  to  draw  interest 
and  the  coupons  for  interest  subsequent  to  that  date 
shall  be  void,  and  such  notes  shall  cease  to  be  entitled 
to  any  benefit  of  this  Agreement  except  to  receive  pay¬ 
ment  from  the  moneys  reserved  therefor  in  the  hands  of 
the  Trustee. 

Notes  redeemed  shall  be  cancelled  and  no  notes  shall 
be  issued  in  place  thereof. 

The  holder  of  each  and  even7  note  issued  under  this 
Agreement,  hereby  agrees  to  accept  payment  thereof 
prior  to  maturity  on  the  terms  and  conditions  in  this 
Article  provided. 


ARTICLE  V. 

Remedies  of  Trustee  and  Noteholders. 

Section  1.  If  one  or  more  of  the  following  events, 
herein  called  “Events  of  Default”  shall  happen,  that  is 
to  say:  (1)  if  default  be  made  in  the  punctual  payment 
of  the  principal  of  any  of  the  said  notes,  or  (2)  if  default 
be  made  in  the  punctual  payment  of  any  installment  of 
interest  and  such  default  shall  continue  for  thirty  days, 
or  (3)  if  default  be  made  in  the  due  observance  and  per¬ 
formance  of  any  other  covenant  or  condition  or  agree¬ 
ment  on  the  part  of  the  Company,  its  successors  or  assigns 
in  the  said  notes  or  in  this  Agreement  contained,  and 
any  such  last  named  default  shall  continue  for  a  period 
of  thirty  days  after  written  notice  thereof  shall  have  been 
given  to  the  Company  by  the  Trustee,  whose  duty  it  shall 
be  to  give  such  notice  at  the  request  in  writing  of  the 
holders  of  at  least  twenty-five  per  cent,  in  principal 
amount  of  the  notes  at  the  time  outstanding  hereunder, 
or  in  case  (4)  an  order  shall  have  been  made  for  the 
appointment  of  a  receiver  of  the  Company  or  of  its  prop- 


24 


erty  and  remain  in  force  for  thirty  days,  or  the  Company 
shall  be  judicially  declared  to  he  bankrupt  or  insolvent, 
or  (5)  in  case  the  Company  shall  institute  proceedings 
for  voluntary  bankruptcy,  or  shall  make  an  assignment 
for  the  benefit  of  its  creditors,  or  shall  admit  in  writing 
its  inability  to  pay  its  debts  generally  as  they  become 
due — then  in  each  and  every  such  case  the  Trustee  may, 
and  upon  written  request  of  the  holders  of  twenty-five 
per  cent,  in  principal  amount  of  the  notes  at  such  time 
outstanding  (not  including  the  principal  amount  of  any 
series  of  notes,  which,  at  such  time,  shall  have  become 
due  according  to  the  date  of  maturity  specified  therein), 
shall,  declare  the  principal  of  all  notes  then  outstanding 
hereunder  to  be  due  and  payable  immediately,  and  upon 
any  such  declaration,  the  same  shall  become  and  shall 
be  immediately  due  and  payable,  anything  in  this  Agree¬ 
ment  or  in  said  notes  contained  to  the  contrary  notwith¬ 
standing. 

This  provision,  however,  is  subject  to  the  condition 
that  if  at  any  time  after  the  principal  of  said  notes  shall 
have  been  so  declared  and  become  due  and  payable  and 
before  any  judgment  or  decree  for  the  payment  of  moneys 
due  shall  have  been  entered,  all  arrears  of  interest  upon 
all  the  notes  (with  interest  upon  any  overdue  install¬ 
ment  of  interest  at  the  rate  of  seven  per  cent.  (7%)  per 
annum),  and  all  other  sums  payable  under  this  Agree¬ 
ment  (except  the  principal  of  the  notes  which  shall  have 
been  declared  and  become  due  and  payable  before  matu¬ 
rity)  shall  have  been  duly  paid  and  all  defaults  shall 
have  been  made  good,  then  and  in  every  such  case  the 
holders  of  seventy-five  per  cent.  (75%)  in  principal 
amount  of  the  notes  then  outstanding,  by  written  notice 
to  the  Company  and  to  the  Trustee  may  rescind  and  annul 
such  declaration  and  its  consequences ;  but  no  such  rescis- 


25 


sion  or  annulment  shall  extend  to  or  shall  affect  any  sub¬ 
sequent  default  or  shall  impair  any  right  consequent 
thereon. 

Section  2.  The  Company  covenants  that  (1)  in  case 
default  shall  be  made  in  the  punctual  payment  of  any 
installment  of  interest  on  any  note  or  notes  at  any  time 
outstanding  under  this  Agreement,  and  such  default 
shall  have  continued  for  the  period  of  thirty  days,  or  (2) 
in  case  default  shall  be  made  in  the  payment  of  the  prin¬ 
cipal  of  any  note  or  notes  when  the  same  shall  become 
payable,  whether  upon  maturity  of  any  of  said  notes 
or  upon  declaration  as  provided  in  this  Agreement,  then 
upon  demand  of  the  Trustee  the  Company  will  pay  to 
the  Trustee  for  the  benefit  of  the  holders  of  the  notes 
and  coupons  issued  hereunder  and  then  outstanding,  the 
whole  amount  which  then  shall  have  become  due  and 
payable  on  all  such  notes  and  coupons  then  outstanding 
for  interest  or  principal  or  both  as  the  case  may  be,  with 
interest  at  the  rate  of  seven  per  cent,  per  annum  upon 
the  overdue  principal  and  installments  of  interest;  and 
in  addition  thereto  such  further  amount  as  shall  be  suffi¬ 
cient  to  cover  the  cost  and  expenses  of  collection,  includ¬ 
ing  a  reasonable  compensation  to  the  Trustee,  its  agents, 
attorneys  and  counsel  and  any  expenses  or  liabilities  in¬ 
curred  by  the  Trustee  hereunder. 

Until  such  demand  is  made  by  the  Trustee,  the  Com¬ 
pany  may  pay  the  principal  and  interest  of  the  notes  to  the 
holders  and  registered  owners  thereof,  and  shall  not  be 
affected  by  any  notice  to  the  contrary,  whether  the  notes 
are  overdue  or  not.  If,  however,  demand  shall  be  so 
made,  payment  of  the  notes  or  of  the  coupons  shall  be 
made  thereafter  only  to  the  Trustee. 


26 


In  case  the  Company  shall  fail  forthwith  to  pay  such 
amounts  upon  such  demand  the  Trustee  in  its  own  name 
and  as  trustee  of  an  express  trust  shall  be  entitled  and 
empowered  to  institute  such  action  or  proceedings  at  law 
or  in  equity  as  may  be  advised  by  counsel  for  the  collec¬ 
tion  of  the  sums  so  due  and  unpaid,  and  may  prosecute 
any  such  action  or  proceedings  to  judgment  or  final  de¬ 
cree,  and  may  enforce  any  such  judgment  or  final  decree 
against  the  Company,  and  collect  the  moneys  adjudged 
or  decreed  to  be  payable  out  of  the  property  of  the  Com¬ 
pany  wherever  situated,  in  the  manner  provided  by  law. 

Section  3.  The  Trustee  shall,  upon  the  written  re¬ 
quest  of  seventy-five  per  cent.  (75%)  in  principal  amount 
of  the  holders  of  the  notes  at  any  time  outstanding  here¬ 
under,  waive  any  default  hereunder  and  its  consequences, 
except  (1)  a  default  in  the  payment  of  the  principal  of 
said  notes  at  the  respective  dates  of  maturity  specified 
therein,  and  except  (2)  a  default  in  the  payment  of 
interest  on  said  notes  unless,  prior  to  such  waiver,  all 
arrears  of  interest,  with  interest  at  the  rate  of  seven  per 
cent,  per  annum  on  overdue  installments  of  interest,  and 
all  expenses  of  the  Trustee  shall  have  been  paid  by  the 
Company  or  shall  have  been  provided  for  by  a  deposit 
with  the  Trustee  of  a  sum  sufficient  to  pay  the  same.  In 
case  of  any  such  waiver,  or  in  case  any  proceedings  taken 
on  account  of  any  such  default  shall  have  been  discon¬ 
tinued  or  abandoned  or  determined  adversely  to  the 
Trustee,  then  and  in  every  such  case,  the  Company,  the 
Trustee  and  the  note  holders  shall  be  restored  to  their 
former  positions  and  rights  hereunder  respectively,  but 
no  such  waiver  shall  extend  to  any  subsequent  or  other 
default  or  impair  any  right  consequent  thereon. 

Section  4.  All  rights  of  action  under  this  Agreement 
or  under  any  of  the  said  notes  or  coupons  may  be  enforced 


27 


by  the  Trustee  without  the  possession  of  any  of  the  notes 
or  coupons  or  the  production  thereof  on  any  trial  or  other 
proceedings  relative  thereto,  and  any  such  suit  or  proceed¬ 
ings  instituted  by  the  Trustee  shall  be  brought  in  its 
name  as  Trustee  and  any  recovery  of  judgment  shall  be 
for  the  ratable  benefit  of  the  holders  of  said  notes  and 
coupons. 

Section  5.  Any  moneys  collected  by  the  Trustee  shall 
be  applied  as  follows  at  the  date  fixed  by  the  Trustee  for 
the  distribution  of  such  moneys,  upon  presentation  of  the 
several  notes  and  coupons,  and  stamping  thereon  the  pay¬ 
ment,  if  only  partially  paid,  and  upon  the  surrender 
thereof,  if  fully  paid : 

First.  To  the  payment  of  costs  and  expenses,  including 
a  reasonable  compensation  to  the  Trustee,  its  agents,  at¬ 
torneys  and  counsel,  and  of  all  expenses,  liabilities  and 
advances  made  or  incurred  by  the  Trustee. 

Second.  In  case  the  principal  of  the  notes  issued  under 
this  Agreement  shall  not  have  become  due,  to  the  payment 
of  the  interest  in  default  in  the  order  of  the  maturity  of 
the  installments  of  such  interest,  with  interest  on  the 
overdue  installments  at  the  rate  of  seven  per  cent,  per 
annum ;  such  payments  to  be  made  ratably  to  the  persons 
entitled  thereto,  without  discrimination  or  preference. 

Third.  In  case  the  principal  of  the  notes  shall  have 
become  due  by  declaration  or  otherwise,  to  the  payment 
of  the  whole  amount  then  owing  or  unpaid  upon  the  notes 
then  outstanding  for  principal  and  interest,  with  interest 
at  the  rate  of  seven  per  cent,  per  annum  on  the  overdue 
principal  and  installments  of  interest;  in  case  such 
moneys  shall  be  insufficient  to  pay  in  full  the  whole 
amount  so  due  and  unpaid  upon  the  said  notes,  then  to 
the  payment  of  such  principal  and  interest  without  pref- 


28 


erence  or  priority  of  principal  over  interest,  or  of  interest 
over  principal,  or  of  any  installment  of  interest  over  any 
other  installment  of  interest,  ratably  to  the  aggregate  of 
such  principal  and  accrued  and  unpaid  interest. 

Section  G.  No  holder  of  any  note  issued  hereunder 
shall  have  any  right  to  institute  any  suit,  action  or  pro¬ 
ceeding  in  equity  or  at  law,  for  the  collection  of  any  sum 
due  from  the  Company  on  such  note  on  account  of  prin¬ 
cipal  or  interest,  or  for  the  appointment  of  a  receiver, 
or  for  any  other  remedy  hereunder  or  upon  or  by 
reason  of  such  note,  unless  and  until  such  holder 
shall  have  previously  given  to  the  Trustee  written 
notice  of  such  default  and  of  the  continuance  thereof,  as 
hereinbefore  provided,  and  also  unless  or  until  the  holders 
of  twenty-five  per  cent,  in  principal  amount  of  the  notes 
then  outstanding  shall  have  made  written  request  upon  x 
the  Trustee,  and  shall  have  afforded  to  it  a  reasonable 
opportunity  to  institute  such  action,  suit  or  proceeding 
in  its  own  name,  and  unless  also  they  shall  have  offered 
to  the  Trustee  security  and  indemnity  satisfactory  to  it 
against  the  costs,  expenses  and  liabilities  to  be  incurred 
therein  or  thereby,  and  the  Trustee  for  thirty  days  after 
receipt  of  such  notification,  request  and  offer  of  indem¬ 
nity,  shall  have  neglected  or  refused  to  institute  any  such 
action,  suit  or  proceeding;  and  such  notification,  request 
and  offer  of  indemnity  are  hereby  declared  in  every  such 
case  at  the  option  of  the  Trustee  to  be  conditions  prece¬ 
dent  to  the  execution  of  the  powers  and  trusts1  of  this 
Agreement,  and  to  any  action  or  cause  of  action  or  for 
any  remedy  hereunder;  it  being  understood  and  intended 
and  being  expressly  covenanted  by  the  taker  and  holder 
of  every  note  issued  hereunder,  and  every  other  taker  and 
holder  and  the  Trustee,  that  no  one  or  more  holders  of 
notes  and  coupons  shall  have  any  right  in  any  manner 


29 


whatever  to  affect,  disturb  or  prejudice  the  rights  of  the 
holders  of  any  other  of  such  notes  and  coupons,  or  in  any 
manner  or  way  shall  obtain  or  seek  to  obtain  priority 
over  or  preference  to  any  other  such  holders,  or  to  en¬ 
force  any  right  hereunder,  or  under  or  in  respect  of  said 
notes  or  any  of  them,  except  in  the  manner  herein  pro¬ 
vided,  and  for  the  equal,  ratable  and  common  benefit  of 
all  holders  of  such  outstanding  notes  and  coupons. 

Section  7.  The  Company  for  itself,  its  successors  and 
assigns,  hereby  agrees  to  waive,  and  does  hereby  abso¬ 
lutely  and  irrevocably  waive,  and  relinquish  the  benefit 
and  advantage  of  any  and  all  valuation,  stay,  appraise¬ 
ment,  extension  or  redemption  law  or  laws  now  existing 
or  which  may  hereafter  be  passed,  which,  but  for  this 
provision,  agreement  and  waiver,  might  be  applicable  to 
any  sale  made  under  the  judgment,  order  or  decree  of 
any  court  or  courts  based  on  any  of  said  notes  or  interest 
coupons  or  this  Agreement. 

Section  8.  All  remedies  specifically  conferred  on  the 
Trustee  under  this  Agreement  shall  be  deemed  cumula¬ 
tive  and  not  exclusive,  and  no  delay  or  omission  of  the 
Trustee  or  of  any  holder  of  any  of  the  notes  to  exercise 
any  right  or  power  accruing  upon  any  default,  occurring 
and  continuing  as  aforesaid,  shall  impair  any  such  right 
or  power  or  shall  be  construed  to  be  a  waiver  of  any  such 
default  or  an  acquiescence  therein ;  and  every  power  and 
remedy  given  by  this  Article  to  the  Trustee  or  to  the  note¬ 
holders  may  be  exercised  from  time  to  time  as  often  as 
shall  be  deemed  expedient  by  the  Trustee  or  by  the  note¬ 
holders. 


30 


ARTICLE  VI. 

Exemption  of  Officers,  Directors  and  Stockholders 
from  Liability. 

Each  of  the  notes  secured  hereby  is  issued  upon  the 
express  condition,  to  which  each  successive  holder  thereof 
expressly  assents  and  by  receiving  the  same  agrees,  that 
no  recourse  under  or  upon  any  obligation,  covenant  or 
agreement  of  this  Agreement,  or  for  the  payment  of  any 
note  or  coupon  hereby  secured,  or  the  indebtedness  or 
any  part  thereof  evidenced  thereby  shall  he  had  to  any 
individual  liability  of  any  incorporator,  or  any  past, 
present  or  future  stockholder,  officer  or  director  of  the 
Company  or  of  any  successor  company  or  of  any  com¬ 
pany  Avhich  may  assume  or  guarantee  the  payment  of 
the  principal  or  interest  of  the  notes  issued  hereunder, 
either  directly  or  through  the  Company  or  through  any 
such  company  by  virtue  of  any  constitutional  or  statu¬ 
tory  provisions  or  by  the  enforcement  of  any  assessment 
or  of  any  unpaid  installment  on  stock  or  otherwise,  all 
such  liability  being  taken  to  be  waived,  and  it  being  ex¬ 
pressly  understood  and  agreed  that  this  Agreement  and 
the  obligations  issued  hereunder  are  solely  corporate  ob¬ 
ligations,  and  that  no  personal  liability  whatever  shall 
attach  to  or  be  incurred  by  the  incorporators,  or  by  any 
past,  present  or  future  stockholders,  directors  or  officers 
of  the  Company  or  of  any  successor  company  or  of  any 
corporation  which  may  assume  or  guarantee  the  pay¬ 
ment  of  the  principal  or  interest  of  the  notes  issued  here¬ 
under,  under  or  by  reason  of  any  of  the  obligations,  cove¬ 
nants  or  agreements  in  this  Agreement  contained,  or  in 
any  of  the  notes  or  coupons  issued  hereunder  or  implied 
therefrom  or  by  reason  of  the  assumption  or  guarantee 
thereof,  and  that  any  and  all  personal  liability  of  every 
nature,  either  in  law  or  in  equity  by  statute  or  constitu- 


31 


lion  of  every  such  incorporator,  stockholder,  director  and 
officer  is  hereby  expresly  waived  asi  a  condition  of  and 
consideration  for  the  execution  and  issue  of  this  Agree¬ 
ment  and  of  such  notes  and  coupons. 

ARTICLE  VII. 

Ownership  of  Notes. 

Section  1.  Any  demand,  or  request  or  other  instru¬ 
ment  required  by  this  Agreement  to  be  signed  and  exe¬ 
cuted  by  noteholders  may  be  in  any  number  of  concur¬ 
rent  writings  of  similar  tenor  and  may  be  signed  or 
executed  by  such  noteholders  in  person  or  by  agent  ap¬ 
pointed  in  writing.  Proof  of  the  execution  of  any  such 
demand,  request  or  other  instrument,  or  of  the  writing 
appointing  any  such  agent,  and  of  the  ownership  by  any 
person  of  any  note,  shall  be  sufficient  for  any  purpose  of 
this  Agreement,  if  such  proof  be  made  in  the  following 
manner : 

(a)  The  fact  and  date  of  the  execution  by  any  person 
of  any  such  demand,  request  or  other  instrument  in  writ¬ 
ing  may  be  proved  by  the  certificate  of  any  Notary  Public 
or  other  officer  authorized  to  take  acknowledgments  of 
deeds  to  be  recorded,  to  the  effect  that  the  person  signing 
such  request  or  other  instrument  acknowledged  to  him 
the  execution  thereof,  or  by  the  affidavit  of  the  witness 
to  such  execution. 

(b)  The  fact  of  the  holding  by  any  noteholder  of  any 
unregistered  notes  and  the  amounts  and  numbers  of  such 
notes,  and  the  date  of  his  holding  the  same,  may  be  proved 
either  by  producing  and  exhibiting  to  the  Trustee  the 
actual  notes  themselves,  or  by  a  certificate  executed  by 
any  trust  company,  bank,  banker  or  other  depositary, 
wherever  situated,  if  such  certificate  shall  be  deemed  by 


32 


the  Trustee  to  be  satisfactory,  showing  that  at  the  date 
therein  mentioned  such  person  had  on  deposit  with  or 
exhibited  to  such  depositary  the  notes  described  in  such 
certificate.  Such  ownership  shall  be  deemed  to  continue 
until  written  notice  to  the  contrary  is  served  upon  the 
Trustee. 

(c)  The  ownership  of  registered  notes  shall  be  proved 
by  the  registers  of  such  notes  or  by  a  certificate  of  the 
registrar  thereof. 

Section  2.  The  Company  and  the  Trustee  may  deem 
and  may  treat  the  bearer  of  any  note  issued  hereunder, 
which  shall  not  at  the  time  be  registered  as  to  principal  as 
hereinbefore  authorized,  and  the  bearer  of  any  coupon  for 
interest  on  any  note,  whether  such  note  shall  be  registered 
or  not,  as  the  absolute  owner  of  such  note  or  coupon,  as 
the  case  may  be,  for  the  purpose  of  receiving  payment  of 
such  note  or  coupon,  and  for  all  other  purposes  whatso¬ 
ever,  whether  such  note  or  coupon  be  overdue  or  not,  and 
neither  the  Company  nor  the  Trustee  shall  be  affected  by 
any  notice  to  the  contrary. 

The  Company  and  the  Trustee  may  deem  and  may 
treat  the  person  in  whose  name  any  note  shall  be  regis¬ 
tered  upon  the  books  of  the  registrar  as  hereinbefore  pro¬ 
vided  as  the  absolute  owner  of  such  note  for  the  purpose 
of  receiving  payment  of  such  note  and  for  all  other  pur¬ 
poses  whatsoever,  whether  such  note  be  overdue  or  not, 
and  neither  the  Company  nor  the  Trustee  shall  be  affected 
by  any  notice  to  the  contrary. 

ARTICLE  VIII. 

Cancellation  of  Agreement. 

If,  when  all  the  notes  issued  hereunder  shall  have 
become  due  and  payable  under  any  provision  thereof  or  of 


33 


this  Agreement,  the  Company  shall  well  and  truly  pay 
or  cause  to  be  paid  the  whole  amount  of  the  principal 
moneys  (and  premium  if  any),  and  interest  due  upon  all 
such  notes,  or  shall  provide  for  such  payment  by  deposit¬ 
ing  with  the  Trustee  for  the  payment  of  such  notes  and 
coupons  the  entire  amount  then  due  or  that  may  become 
due  thereon  for  principal  (and  premium  if  any)  and  in¬ 
terest,  and  shall  also  pay  or  cause  to  be  paid  all  other 
sums  payable  hereunder  by  the  Company  and  shall  well 
and  truly  keep  and  perform  all  the  things  required  to 
be  kept  and  performed  by  it,  according  to  the  true  intent 
and  meaning  of  this  Agreement.,  then  and  in  that  case 
this  Agreement  shall  cease  to  be  of  further  effect,  and  the 
Trustee  on  demand  and  at  the  cost  and  expense  of  the 
Company  shall  execute  proper  instruments  cancelling 
and  discharging  this  Agreement. 

ARTICLE  IX. 

Concerning  the  Trustee. 

Section  1.  The  Trustee  shall  not  be  answerable  for 
the  default  or  the  misconduct  of  any  agent  or  attorney 
appointed  in  pursuance  hereof,  if  such  agent  or  attorney 
shall  have  been  selected  with  reasonable  care,  nor  respon¬ 
sible  for  anything  whatever  in  connection  with  this  trust 
except  for  its  willful  misconduct  or  willful  default.  The 
Trustee  shall  be  under  no  obligation  to  take  any  action 
toward  the  execution  or  enforcement  of  the  trusts  hereby 
created  which,  in  its  opinion,  shall  be  likely  to  involve  it 
in  expense  or  liability,  unless  one  or  more  of  the  liolders 
of  notes  issued  hereunder  shall,  as  often  as  required  by 
the  Trustee,  furnish  indemnity  satisfactory  to  the  Trustee 
against  such  expense  or  liability  ;  nor  shall  the  Trustee 
be  required  to  take  notice  of  any  default  or  Event  of  De¬ 
fault  hereunder,  and  it  may,  for  all  purposes,  conclusively 


34 


assume  that  there  has  been  no  default  or  Event  of  Default 
hereunder,  unless  and  until  notified  in  writing  thereof 
by  the  holders  of  at  least  twenty-five  per  cent,  in  principal 
amount  of  the  notes  issued  hereunder  and  then  outstand¬ 
ing,  or  to  take  any  action  in  respect  to  any  default  or 
Event  of  Default  unless  requested  to  take  action  in  respect 
thereof  by  a  writing  signed  by  the  holders  of  not  less  than 
twenty-five  per  cent,  in  principal  amount  of  the  notes 
issued  hereunder  and  then  outstanding,  and  upon  being 
tendered  indemnity  as  hereinbefore  provided.  The  fore¬ 
going  provisions  of  this  Section  are  intended  only  for  the 
protection  of  the  Trustee  and  shall  not  be  construed  to 
affect  any  discretion  or  power  by  any  provision  of  this 
Agreement  given  to  the  Trustee  to  determine  whether  or 
not  it  shall  take  action  in  respect  of  any  default  or  Event 
of  Default  without  such  notice  or  request  from  the  note¬ 
holders,  or  to  affect  any  other  discretion  or  power  given  to 
the  Trustee. 

Any  action  by  the  Trustee  upon  the  request  of  any 
person  who  at  the  time  is  the  owner  of  any  such  notes, 
shall  be  conclusive  and  binding  upon  all  future  owners 
of  the  same  notes. 

This  Agreement  need  not  be  recorded,  registered  or 
filed  by  the  Trustee. 

The  Trustee  shall  incur  no  liability  to  anybody  in 
acting  upon  any  notice,  request,  opinion,  consent,  cer¬ 
tificate,  note,  document,  or  paper  believed  by  it  to  be 
genuine  or  to  have  been  signed  or  sent  by  the  proper  per¬ 
sons. 

The  Trustee  may  receive  a  certificate  under  the 
corporate  seal  of  the  Company  and  signed  by  the 
Secretary  or  an  Assistant  Secretary  of  the  Company 
as  sufficient  evidence  of  the  due  adoption  of  any  resolu¬ 
tion  by  the  Board  of  Directors  of  the  Company.  The 
Trustee  may  rely  upon,  and  shall  incur  no  liability  for 


35 


any  action  taken  by  it  in  reliance  upon  any  such  certifi¬ 
cate  or  resolution  so  certified. 

The  Trustee  shall  be  reimbursed  by  the  Company  upon 
demand  for,  and  be  indemnified  against,  any  liability  or 
damages  which  may  be  sustained  by  it  in  the  premises. 
The  Trustee  shall  have  a  claim  prior  to  that  of  any  note 
or  coupon  issued  hereunder  for  its  compensation  and  ex¬ 
penses,  and  also  for  any  liability  or  damage  by  it  sus¬ 
tained  in  the  premises. 

The  Trustee  makes  no  undertaking  in  respect  of,  and 
shall  not  be  responsible  in  any  manner  whatsoever  for, 
the  validity  or  execution  of  this  Agreement  or  of  any  of 
the  notes  issued  hereunder  or  the  recitals  herein  or  in 
said  notes  contained,  all  such  recitals  being  made  and  to 
be  taken  as  statements  of  the  Company  solely;  nor  shall 
the  Trustee  be  accountable  or  responsible  for  the  use  of 
any  notes  certified  and  delivered  hereunder,  or  for  the 
application  of  the  proceeds  of  such  notes,  or  for  the  per¬ 
formance  or  fulfillment  of  any  covenant  or  agreement 
herein  provided  to  be  kept  by  the  Company.  The  Trustee 
may  advise  with  counsel,  and  any  action  taken  or  suffered 
under  this  Agreement  in  good  faith  by  the  Trustee,  in  ac¬ 
cordance  with  the  opinion  of  counsel,  shall  be  conclusive 
on  the  Company  and  on  all  holders  of  notes  issued  here¬ 
under,  and  the  Trustee  shall  be  fully  protected  in  respect 
to  any  such  action. 

Anyone  holding  the  office  of  Trustee  hereunder  may 
from  time  to  time  purchase,  acquire,  hold,  own  and  deal 
in  any  of  the  notes  issued  hereunder,  and  assert  its 
rights  in  respect  thereof  in  the  same  manner  as  any  other 
noteholder  hereunder. 

Any  moneys  received  by  the  Trustee  under  any  pro¬ 
vision  of  this  Agreement,  may  be  treated  by  it,  until  it  is 
required  to  pay  out  the  same  conformably  herewith,  as  a 
general  deposit,  without  any  liability  for  interest,  save 


36 


as  may  be  agreed  upon  between  the  Company  and  the 
Trustee. 

The  Trustee  shall  be  entitled  to  reasonable  compensa¬ 
tion  for  all  services  rendered  by  it  in  the  execution  of 
the  trusts  hereby  created,  including  reasonable  counsel 
fees  for  the  services  of  counsel  in  connection  with  the 
execution  of  such  trusts,  and  the  Company  hereby  agrees 
to  pay  such  compensation,  as  Avell  as  all  expenses  neces¬ 
sarily  incurred  or  disbursed  by  the  Trustee  hereunder. 
In  case  of  non-payment  of  any  such  compensation  or  ex¬ 
penses,  the  amount  unpaid  shall  be  a  claim  against  the 
Company  and  a  lien  upon  any  and  all  moneys  collected 
under  this  Agreement  prior  to  the  notes  and  coupons 
issued  hereunder.  The  compensation  of  the  Trustee  shall 
not  be  limited  by  any  provision  of  law  in  regard  to  the 
compensation  of  a  trustee  of  an  express  trust. 

Section  2.  Any  company  into  which  the  Trustee  may 
be  merged,  or  with  which  it  may  be  consolidated,  or  any 
company  resulting  from  any  merger  or  consolidation  to 
which  the  Trustee  shall  be  a  party,  shall  be  the  successor 
of  the  Trustee  hereunder,  without  the  execution  or  filing 
of  any  paper  or  any  further  action  on  the  part  of  any  of 
the  parties  hereto,  anything  herein  to  the  contrary  not¬ 
withstanding.  In  case  any  of  the  notes  issued  hereunder 
shall  have  been  authenticated  but  not  delivered,  then  the 
successor  Trustee  may  adopt  the  certificate  of  authenti¬ 
cation  of  the  Guaranty  Trust  Company  of  New  York  and 
deliver  the  same  so  authenticated;  and  in  case  any  of 
such  notes  shall  not  have  been  authenticated,  any  suc¬ 
cessor  Trustee  may  authenticate  such  notes  by  the  Secre¬ 
tary  or  Assistant  Secretary  of  the  successor  trustee;  and 
in  all  such  cases  such  certificate  shall  have  the  full  force 
which  it  is  anywhere  in  said  notes  or  in  this  Agreement 
provided  that  the  certificate  of  the  original  Trustee  shall 
have. 


37 


Section  3.  The  Trustee  or  any  trustee  or  trustees 
hereafter  appointed,  may  resign  the  trusts  hereby  created 
and  become  and  remain  fully  discharged  from  all  further 
duty  or  responsibility  hereunder,  upon  giving  thirty  days 
notice  in  writing  to  the  Company  or  any  officer  thereof, 
personally  or  by  mailing,  or  such  shorter  notice  as  the 
Company  may  accept  as  sufficient,  in  which  notice  there 
shall  be  stated  a  date  when  such  resignation  shall  take 
effect;  and  such  resignation  shall  take  effect  on  the  day 
specified  in  said  notice  unless  previously  a  successor 
trustee  shall  be  appointed,  as  hereinafter  provided,  in 
which  event  such  resignation  shall  take  effect  immedi¬ 
ately  upon  the  appointment  of  such  successor  trustee. 
The  Trustee  may  be  removed  from  office  at  any  time  by 
an  instrument  in  writing  under  the  hands  of  the  holders 
of  a  majority  in  principal  amount  of  the  notes  issued 
hereunder  and  then  outstanding,  subject  to  the  right  of 
the  Trustee  to  receive  reasonable  compensation  for  its 
services  and  repayment  of  all  costs,  charges  and  expenses 
incurred. 

Section  4.  In  the  event  of  the  resignation  or  removal 
of  the  Trustee,  it  is  hereby  provided  and  agreed  that  the 
Company  shall  nominate  and  appoint  a  new  trustee  in  its 
place  and  stead.  Said  appointment  shall  be  attested  by 
the  certificate  in  writing  of  the  President  or  a  Vice-Presi¬ 
dent  and  Secretary  or  an  Assistant  Secretary  of  the  Com¬ 
pany,  under  its  corporate  seal. 

Immediately  upon  such  appointment  the  Company 
shall  give  notice  thereof  by  publication  in  at  least  one 
newspaper  published  in  the  City  of  New  York,  once  a 
week  for  at  least  four  successive  weeks.  Within  ninety 
days  after  the  commencement  of  such  publication  the 
holders  of  a  majority  in  principal  amount  of  the  notes 
issued  hereunder  and  then  outstanding  shall  have  power 


38 


to  nominate  and  appoint,  by  an  instrument  in  writing 
signed  by  such  majority,  another  trustee  in  the  place 
and  stead  of  the  one  so  appointed  by  the  Company.  If 
the  owners  and  holders  of  a  majority  in  principal  amount 
of  the  notes  issued  hereunder  and  then  outstanding  shall 
not  make  such  nomination  and  appointment  within  said 
ninety  days,  then  the  trustee  so  nominated  and  appointed 
by  the  Company  shall  continue  to  act  as,  and  be  the 
Trustee  hereunder. 

Any  trustee  appointed  hereunder  shall  always  be  a 
trust  company  in  good  standing,  having  its  principal 
office  in  the  Borough  of  Manhattan,  City  of  New  York, 
and  having  a  capital  and  surplus  of  not  less  than  $1,000,- 
000,  if  there  be  such  a  trust  company  willing  and  able  to 
accept  the  trust  upon  reasonable  or  customary  terms. 

Any  such  new  trustee  appointed  hereunder  shall  exe¬ 
cute,  acknowledge  and  deliver  to  the  Company  an  instru¬ 
ment  accepting  such  appointment  hereunder,  and  there¬ 
upon  such  successor  trustee  without  any  further  act,  deed 
or  conveyance,  shall  become  vested  with  all  the  rights, 
powers,  trusts,  duties  and  obligations  of  its  predecessor 
in  the  trust  hereunder,  with  like  effect,  as  if  originally 
named  as  trustee  hereunder;  but,  nevertheless,  on  the 
written  request  of  the  Company  or  of  the  successor  trus¬ 
tee,  the  trustee  ceasing  to  act  shall  execute  and  deliver 
an  instrument  transferring  to  such  successor  trustee  upon 
the  trusts  herein  expressed,  all  the  rights,  powers  and 
trusts  of  the  trustee  so  ceasing  to  act.  Upon  request  of 
any  such  successor  trustee  the  Company  shall  make, 
execute,  acknowledge  and  deliver  any  and  all  instruments 
in  writing  for  more  fully  and  certainly  vesting  in  and 
confirming  to  such  successor  trustee,  all  such  rights, 
powers  and  duties. 


39 


ARTICLE  X. 

Miscellaneous  Provisions. 

Section  1.  All  the  covenants,  stipulations,  promises 
and  agreements  in  this  Agreement  contained,  by  or  in 
behalf  of  the  Company,  shall  bind  its  successors  and 
assigns,  whether  so  expressed  or  not,  and  are  for  the 
common  and  equal  use,  benefit  and  security  of  all  and 
singular  the  present  and  future  holders  or  owners  of  notes 
issued  hereunder,  or  of  any  of  them,  without  preference, 
priority  or  distinction  of  any  of  said  notes  over  any  of  the 
others  by  reason  of  priority  in  the  issue,  sale  or  negotia¬ 
tion  thereof,  or  otherwise. 

Section  2.  Nothing  in  this  Agreement  or  in  the  notes 
or  coupons  issued  hereunder,  expressed  or  implied,  is 
intended  or  shall  be  construed  to  give  to  any  person  or  cor¬ 
poration  other  than  the  parties  hereto  and  the  holders  of 
notes  issued  under  this  Agreement,  any  legal  or  equitable 
right,  remedy  or  claim  under  or  in  respect  to  this  Agree¬ 
ment,  or  under  any  covenant,  condition  or  provision 
herein  contained;  all  its  covenants,  conditions  and  pro¬ 
visions  being  intended  to  be  and  being  for  the  sole  and 
exclusive  benefit  of  the  parties  hereto  and  of  the  holders 
of  the  obligations  hereby  secured. 

Section  3.  In  case  the  Company  shall  be  consoli¬ 
dated  or  merged  with  any  other  corporation,  the  successor 
corporation  formed  by  such  consolidation  or  into  which 
the  Company  shall  have  been  merged — upon  executing  an 
instrument  satisfactory  to  the  Trustee  whereby  such  suc¬ 
cessor  corporation  shall  assume  the  due  and  punctual  pay¬ 
ment  of  the  principal  and  interest  of  the  notes  issued  here¬ 
under  and  the  performance  of  all  the  covenants  and 
conditions  of  this  Agreement — shall  succeed  to  and  be 


40 


substituted  for  the  Company,  party  of  the  first  part 
hereto,  with  the  same  effect  as  if  it  had  been  named 
herein  as  such  party  of  the  first  part. 

Section  4.  For  every  purpose  of  this  Agreement,  in¬ 
cluding  the  execution,  issue  and  use  of  any  and  all  notes 
issuable  hereunder,  the  terms  “Company”  and  “The  Amer¬ 
ican  Tobacco  Company,''  include  and  mean  not  only  the 
party  of  the  first  part  hereto  but  also  any  successor  cor¬ 
poration  formed  by  consolidation  or  otherwise,  under  the 
laws  of  the  State  of  New  Jersey  or  of  any  State  or  States 
or  of  the  United  States.  Every  such  successor  corporation 
shall  possess  and  from  time  to  time  may  exercise  each  and 
every  right  and  power  hereunder  of  The  American  Tobacco 
Company,  in  its  name,  or  otherwise. 

Any  act  or  proceeding  by  any  provision  of  this  Agree¬ 
ment  required  to  be  done  or  performed  by  any  Board  or 
Officer  of  the  Company  shall  and  may  be  done  and  per¬ 
formed  with  like  force  and  effect  by  the  like  Board  or 
Officer  of  any  Corporation  that  shall  at  the  time  be  such 
lawful  successor  of  the  Company. 

Section  5.  The  word  “Trustee”  shall  include  and 
mean  the  Guaranty  Trust  Company  of  New  York  and  any 
successor  Trustee;  the  words  “note”  and  “noteholder” 
shall  include  the  plural  as  well  as  the  singular  number, 
unless  otherwise  expressly  indicated.  The  word  “cou¬ 
pons'’  refers  to  the  interest  coupons  attached  to  the  notes 
issued  hereunder.  The  word  “person”  used  with  refer¬ 
ence  to  a  noteholder  shall  include  associations,  or  corpora¬ 
tions  owning  any  of  said  obligations. 

Section  6.  This  Agreement  is  made  and  is  to  be  per¬ 
formed  in  the  State  of  New  York.  This  Agreement  and 
the  rights  and  remedies  of  the  parties  hereto  and  of  the 


41 


holders  of  the  notes  and  appurtenant  coupons  shall  be 
governed  by  the  laws  of  the  State  of  New  York. 

In  witness  whereof,  The  American  Tobacco  Com¬ 
pany,  party  of  the  first  part,  has  caused  this  Agree¬ 
ment  to  be  executed  and  acknowledged  by  its  President 
or  a  Vice-President,  and  its  corporate  seal  to  be  hereunto 
affixed  and  attested  by  the  signature  of  its  Secretary 
or  an  Assistant  Secretary,  and  Guaranty  Trust  Company 
of  New  York,  party  of  the  second  part,  has  caused  this 
Agreement  to  be  executed  by  one  of  its  Vice-Presidents, 
and  its  corporate  seal  to  be  hereunto  affixed  and  attested 
by  the  signature  of  its  Secretary  or  an  Assistant  Secre¬ 
tary,  all  as  of  this  day  and  year  first  above  written. 

The  American  Tobacco  Company, 
Charles  S.  Keene 

[Corporate  Seal]  Vice-President. 


Attest : 

Charles  F.  Neiley 

Secretary. 

Guaranty  Trust  Company  of  New  York, 
By  James  L.  O’Neill 

[Corporate  Seal]  Vice-President. 


Attest : 


II.  R.  Johnston 

Asst.  Secretary. 


42 


State  of  New  York!  gg  . 

County  of  New  York  j 

On  the  2nd  day  of  November,  in  the  year  one  thou¬ 
sand  nine  hundred  and  eighteen,  before  me  personally 
came  Chas.  S.  Keene,  to  me  known,  who  being  by  me 
duly  sworn,  did  depose  and  say  that  he  resides  in 
New  York  City,  N.  Y. ;  that  he  is  a  Vice  President 
of  The  American  Tobacco  Company,  the  corporation 
described  in  and  which  executed  the  above  instrument; 
that  he  knows  the  seal  of  said  corporation ;  that  the  seal 
affixed  to  the  said  instrument  is  such  corporate  seal ;  that 
it  was  so  affixed  by  order  of  the  Board  of  Directors  of 
said  corporation,  and  that  he  signed  his  name  thereto  by 
like  order. 

Thomas  F.  Moore 
Notary  Public,  New  York  County, 

New  York  County  No.  176,  New  York  Register  No.  10025 
Commission  expires  November  30,  1920. 

[Notarial  Seal] 


State  of  New  York,!  . 

County  of  New  York,[  " 

On  the  2nd  day  of  November,  in  the  year  one  thou¬ 
sand  nine  hundred  and  eighteen,  before  me  personally 
came  Jas.  L.  O’Neill,  to  me  known,  who,  being  by  me  duly 
sworn,  did  depose  and  say  that  he  resides  in  Newark, 
N.  J. ;  that  he  is  one  of  the  Vice-Presidents  of  Guaranty 
Trust  Company  of  New  York,  the  corporation  described 
in  and  which  executed  the  above  instrument ;  that  he 
knows  the  seal  of  said  corporation ;  that  the  seal  affixed 
to  the  said  instrument  is  such  corporate  seal;  that  it  was 
so  affixed  by  order  of  the  Board  of  Directors  of  said  cor¬ 
poration,  and  that  he  signed  his  name  thereto  by  like 
order. 

Thomas  F.  Moore 
Notary  Public,  New  York  County, 

New  York  County  No.  176,  New  York  Register  No.  10025 
Commission  expires  November  30,  1920. 

[Notarial  Seal] 


A1592 


3  0112  105646639 


